Receive the latest politics updates in your inbox

Gov. Rick Perry delivered his State of the State speech Tuesday in Austin and discussed money for roads, returning taxpayer money and even got heckled. (Published Tuesday, Jan. 29, 2013)

Updated at 8:30 PM CDT on Tuesday, Jan 29, 2013

Gov. Rick Perry presented a glowing assessment of the Texas economy Tuesday and said there was more than enough money in the state's Rainy Day Fund for a one-time, $3.7 billion-investment in water and transportation upgrades while also cutting taxes.

The Republican governor, who for weeks has called on the Legislature to hold down government spending even with the state's economy booming, used his biennial State of the State speech Tuesday in the House chamber to call for a one-time investment in infrastructure he said is needed to ensure a high quality of life. The Texas constitution calls for a percentage of oil and gas revenues to go into the Rainy Day Fund, which is nearing its constitutional cap.

Perry also called on lawmakers to amend the Texas Constitution to allow the state to return tax money it collects but doesn't spend to its citizens.

"Today, I'm calling for a mechanism to be put in place so when we do bring in more than we need, we'll have the option of returning tax money directly to the people who paid it," the governor said. "Currently, that's not something our constitution allows. We need to fix that."

About 64 percent of state revenues come from sales tax, so it's not clear how money could be returned directly to taxpayers.

More than a dozen protesters with the Texas Organizing Project interrupted the speech from the House gallery. According to Ginny Goldman, the group's executive director, security officers detained James Caldwell of Houston after he shouted "Governor Perry, what are you going to do about the 7 million uninsured people in Texas?'

The outburst caused Perry to pause while Republican drowned out the protesters with a standing ovation. Security escorted the entire group out of the chamber and Caldwell was detained for questioning, Goldman said.

Tuesday marks the seventh time Perry has given the State of the State since taking over for George W. Bush as governor in December 2000. Two years ago, he declared there would be "no sacred cows" immune to deep budget cuts as the state struggled with a $27 billion budget deficit amid an economy still feeling the effects of The Great Recession.

"The tough decisions we faced last session tested our resolve and our dedication to the principles that brought us here," Perry said Tuesday. "In the end, we remained dedicated to those principles, holding the line on taxes, spending within our means and making the tough decisions separating wants from needs."

"I think what we saw in this State of the State is very much like we saw in the last State of the State, which is an indication that our governor does not believe truly in investing in the future of Texas," said Sen. Wendy Davis, D-Fort Worth. "Instead of talking about how we would restore the devastating cuts to public ed and higher ed, how we would make sure we resolve the tremendous number of uninsured in the state of Texas, instead he's talking about returning money that shouldn't have been collected."

Some North Texas Republicans said they like the direction Perry is leading the state.

"We heard them speak about tax relief," Rep. Stefani Carter said. "I think every American and every Texan wants to hear about tax relief, so I liked most of his agenda."

Carter said some Republicans are not against the idea of putting more money into education funding.

"There is stomach to increase funding for public education," Carter said. "To what extent, I’m not sure, but those dialogues are preliminary, and I think we need to be looking at that issue very seriously."

One thing Perry did not say during his address is if he will seek a fourth full term as governor. Perry has held his post longer than anyone in Texas history and is also the longest-serving governor in the country, but he says he won't announce his plans until this summer.

That's a world of difference from his 2011 State of the State, when Perry was looking to position himself for a presidential run. He entered the contest for the Republican nomination in August 2011 and immediately became the front-runner. But his campaign flamed out nearly as quickly amid a series of public gaffes that made the governor a national punch line.

Perry also hasn't ruled out another try at the White House in 2016, though it's unclear if his running for governor again would help or hurt such a bid.